It’s always nice to get an unexpected credit of money to your account, besides your monthly paycheck. Investing in stocks can help you do that, through dividends distributed from the company’s profits. Though not all companies pay dividends (some never do), there are a few companies that pay dividends regularly, attracting long-time investors who look forward to that.
Usually, some large-cap companies regularly pay dividends (sometimes multiple times a year), most of them don’t need to reinvest their profits into R&D or business expansion. A company’s dividend-paying ability is judged through its dividend yield, which is the annual dividend per share/ current market price x 100.
Though there are companies that have had historically high dividend yields, there is no guarantee that the dividend payouts will continue. If you would like to earn from your investments right away, its always a good idea to hedge your bets and diversify your investments to reduce risk and get a consistent income through dividends, even if some companies choose not to pay dividends for any reason.
Here are 10 of the most popular dividend stocks among Indian investors.
1.Vedanta Ltd
Dividend Yield- 8.84%
If there were a ‘golden goose’ competition between Indian companies, Vedanta would surely win it hands down. Vedanta is known to offer frequent dividend payouts each year since 2020. Last year, the mining major paid a total of Rs.44 in four separate interim dividend payouts. The company could do this based on its high cash return policy on the back of a strong demand for its commodities like Aluminium and Zinc in the markets.
2. Coal India Limited
Dividend Yield- 6.75%
Despite the government’s renewed focus on weaning itself away from its addiction to coal, this state-controlled coal mining giant has been an investor’s darling for its multiple interim dividends paid every year. With a more than 80% share in coal mining, this near-monopoly status gives the company the ability to offer regular cash handouts disregarding the market prices.
3. Hindustan Zinc Ltd
Dividend Yield- 6.70%
Holding a near monopoly in zinc production, along with being India’s leading producer of lead and silver, Hindustan Zinc is known for its industry-leading EBITDA margins, which allow for sizable cash returns for investors. The company has kept its record of two interim dividends since 2003, making this one a favourite for small time investors looking to earn an additional income while staying invested.
4. Castrol India Ltd
Dividend Yield- 6.59%
A wide pan-India network, manufacturing facilities and a strong brand make Castrol’s industrial and automotive lubricant business almost recession-proof. This Joint Venture company with oil major BP has been offering 2-3 dividend payouts each year since 2003, becoming a stock worth gold for many small-time retail investors.
5. Gujarat Pipavav Port Ltd (APM Terminals Pipavav)
Dividend Yield-5.44%
Operating a strategically located port on the Gujarat coast has blessed this company with strong financials, near-zero debt, and most importantly, the propensity to offer regular dividend payouts, mostly two each financial year. The company handles the bulk of India’s lucrative seafood and commodity exports through road, and its direct access to the Western Dedicated Freight Corridor at Pipavav. Giving North India direct access to major shipping routes has helped Gujarat Pipavav Port Ltd remain an investor favourite.
6. HCL Technologies
Dividend Yield- 4.21%
One of the earliest success stories of India’s IT boom, HCL Technologies has remained an investor favourite for its almost quarterly dividend payouts since 2003, irrespective of the market conditions or its financial performance. The company is blessed with predictable cash flows that allow it to reward its investors handsomely, while also earning its status as a blue-chip stock that has risen more than 1,000% since the turn of the 21st century.
7. NMDC Ltd
Dividend Yield- 4.38%
Being India’s leading iron ore miner has helped it gain high operating leverage along with the capacity to offer consistent dividends mostly twice every year since 2003. As a navratna PSU, the company has also ventured into exploration into mining copper, rock phosphate, limestone and tungsten, among others. With domestic steel demand remaining steady, the company has chosen to reward its shareholders with predictable dividends based on its operating leverage.
8. TCS
Dividend Yield- 4.13%
As India’s leading IT company, TCS has managed to keep the momentum of its dividends, with almost 3-4 payouts every year since 2004. The company’s in-house customised software solutions across banking, insurance, mining and other verticals have been a game changer, offering the company high margins and a greater opportunity to reward its shareholders. This is one stock that remains dear to every investor.
9. Canara Bank
Dividend Yield- 3.70%
This PSU lender has been offering regular dividend payouts almost consistently since 2003. The Bengaluru-based bank has seen a see-saw in its financials, yet this fourth-largest public sector lender has rewarded investors who believed in the company, despite management changes, government-enforced mergers and heightened competition from private lenders.
10. Premco Global Ltd
Dividend Yield- 10.59%
Though not that well known, this small-cap company has one of the highest dividend yields in the market lately, primarily due to a unprecedented Rs.39 per share dividend paid in November 2024. Paying regular dividends since 2007, this Mumbai-based company has maintained its dividend-paying momentum on the back of its brute dominance in supplying jacquard elastic tapes crucial for manufacturing innerwear. With few competitors to challenge them, an increasing number of investors are preferring this company, even though future dividend payouts aren’t guaranteed.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in stocks includes financial risks, and past performance is not indicative of future results. Readers should conduct their own research or consult with a qualified financial advisor before making any investment decisions.
